Investor sentiment was buoyed overnight after President Barack Obama commented that a deal to avert the fiscal cliff was possible in a week provided the Republicans were favoring a tax increase on the wealthiest Americans. The Dow Jones Industrial Average rose 0.64 percent, the S&P 500 Index was up 0.16 percent and the Nasdaq Composite Index declined 0.77 percent as Apple Inc. suffered its worst day of losses in almost four years.

Meanwhile, the U.S. services sector expanded at a faster rate than expected in November as new orders accelerated. The ISM non-manufacturing index, which rates the relative level of business conditions, including employment, production, new orders, prices, supplier deliveries and inventories, rose to 54.7 in November from 54.2 in October and surpassed Reuters' estimate of a slight decline to 53.5. However, the employment portion disappointed with a heavy drop of 4.6 points to 50.3.

“Sentiment is likely to be neutral in Asia Thursday amid lack of major data and as investors look towards tomorrow’s labour market report in the U.S.,” said a note from Credit Agricole.

Japanese shares advanced, led by gains from exporter companies as the yen extended its weak run against the dollar on hopes of further monetary easing measures from the Bank of Japan (BoJ). Hopes of the pro-stimulus Liberal Democratic Party will come to power after the Dec 16 elections also added to the sentiment as major newspaper companies conducted opinion polls, which suggests that the Liberal Democratic Party could secure majority in the House of Representatives.

South Korea’s KOSPI slightly advanced after the official data showed that the country’s economic growth slowed to 0.1 percent in the third quarter of this year compared to that in the previous quarter, weighed down by the faltering global economy and the intensifying debt crisis in the euro zone.